Viacom and Google settle $1 billion YouTube lawsuit

Deal puts an end to seven-year legal battle.

On Tuesday morning, Viacom and Google announced the end of a prolonged $1 billion copyright lawsuit that had centered on unauthorized videos uploaded to the YouTube video-sharing service.

In a joint announcement, the two parties stated that they have arrived at a settlement in the landmark litigation and plan to work together more in the future. The companies issued the following statement:

Google and Viacom today jointly announced the resolution of the Viacom vs. YouTube copyright litigation. This settlement reflects the growing collaborative dialogue between our two companies on important opportunities, and we look forward to working more closely together.

While the terms of the settlement remain undisclosed, the two sides say that the agreement reflects increasingly productive discussions between the two companies and a mutual willingness to work together. No money is reported to have changed hands during the settlement, which came in advance of oral arguments before the Second Circuit Court of Appeals in New York, scheduled for March 24.

The litigation has come at staggering expense to both sides. Google said it racked up more than $100 million in legal fees, and that was in 2010. Viacom surely ran up a similar tab during seven years of litigation.

The settlement comes just 11 months after Judge Louis Stanton in the US District Court in Manhattan denied Viacom’s claims relating to clips posted on YouTube from shows like The Daily Show with Jon Stewart, SpongeBob Squarepants, South Park, and other shows uploaded to YouTube by users. Judge Stanton had found that YouTube was covered by the “safe harbor” protections of the Digital Millennium Copyright Act.

In the lawsuit, Viacom alleged that YouTube was operating outside the parameters of the “safe-harbor provisions” of the DMCA. These important provisions were intended to provide a buffer for companies that host user materials. The statute protects such companies against secondary liability claims brought by copyright holders as long as the Web host follows “notice and takedown procedures” in good faith.

Viacom had claimed that YouTube was aware that thousands of videos on its site directly infringed on Viacom’s copyrighted content, including from such Viacom-owned networks as Comedy Central, MTV, and Nickelodeon. Viacom claimed that YouTube had willfully turned a blind eye to infringing videos posted to the site and had sought more than $1 billion in damages.

YouTube countered that it had promptly complied with the more than 100,000 takedown notices Viacom had sent to it, which targeted videos Viacom claimed to own, and argued that it followed the DMCA safe harbor procedures.

Many in both the technology and media communities viewed the case as an important test of the legal limits of the safe harbor protections against secondary liability for sites hosting user-uploaded materials. Today's settlement is arguably a victory for user-generated content sites that respond to DMCA takedown requests and do not incite their users to commit infringement.